Jarvis pulled out of rail maintenance work in 2003

Charges and write-offs after it quit the rail maintenance business have been compounded by problems at its accommodation services division.

Jarvis's public image was shattered after a series of train derailments, including the 2002 Potters Bar crash.

Shares in the beleaguered firm closed at eight-year lows of 35p, down 55%.

'Challenging times'

The company said it had suffered "a substantial outflow of cash" as it paid debts accumulated from its exit of rail maintenance in 2003 and lower construction volumes in accommodation services.

JARVIS SHARES - 2 JULY Check the Jarvis share price

The company is still involved in the railways, however, and recently won three contracts from Network Rail to renew track at two sites in the UK.

Jarvis is also involved in building and maintaining schools, hospitals and roads.

It is currently in talks with Network Rail about payment for rail renewals work totalling �30m and is re-negotiating its financial agreements with lenders.

But its latest charges and write-offs could top �141m, the group warned.

Chief executive Kevin Hyde said: "This is an extremely challenging time for the group and we are taking the necessary decisions and implementing them.

"Considerable progress had been made and further action is planned to ensure a leaner, more sustainable core business for the future."

Shares in Jarvis have fallen nearly 90% since the start of 2004.